BlackBerry wins US$815 million in overpaid royalty to Qualcomm

BlackBerry said Wednesday it has been awarded US$815 million in an arbitration decision for excess royalties it had paid to chip company Qualcomm.

Qualcomm and BlackBerry had entered into an agreement in April last year to arbitrate a dispute over whether Qualcomm's agreement to cap certain royalties applied to payments made by BlackBerry under a license agreement between the two companies.

Qualcomm has faced charges of excessive royalty rates by regulators as well as other companies. Apple filed a lawsuit in January in a U.S. federal court in California against Qualcomm, objecting, among other things, to the chip company charging a royalty on the selling price of phones rather than on the value of the specific baseband chipset supplied for the iPhone.

The chip company has also run afoul of regulators. It was fined in December by South Korea's antitrust regulator for violating antitrust laws. By January, the U.S. Federal Trade Commission accused it in a lawsuit of forcing phone makers into accepting unfair licensing terms while giving Apple a break in exchange for exclusivity.

The dispute between BlackBerry and Qualcomm appears to have ended amicably with BlackBerry CEO John Chen saying the two companies continue to be "valued technology partners." Chen said he looked forward to collaborating with Qualcomm in security for application-specific integrated circuits and technology for automotive applications, markets BlackBerry has entered after stopping making phones to focus on software.

Qualcomm had earlier described BlackBerry's claims for "return of the alleged overpayment" as without merit. The chip company said on Wednesday it does not agree with the decision but it is binding and not appealable. The arbitration decision was limited to prepayment provisions that were unique to BlackBerry’s license agreement with Qualcomm and has no impact on agreements with any other licensee, it added.

A final award to BlackBerry, including interest and reasonable lawyers fees is scheduled to be issued May 30. The binding arbitration hearing was held in San Diego, California, from Feb. 27 to March 3, according to a statement from BlackBerry.